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Gatik's Great Adventure: Navigating Russian Crude Exports

In Mumbai, a small shipping firm, Gatik Ship Management, operates the new fleet of Russian oil tankers.

This Indian company took control of two dozen tankers after the Russian military invasion of Ukraine

Gatikuses them to move Russian crude to the Mediterranean, Turkey, and India. Gatik is among the firms that have replaced Western-owned ships with aging oil tankers, helping Moscow sell its crude to Asia buyers.

The shipping market has adapted to the political changes, says Frontline Ltd CEO, Lars Barstad.

A European Union oil embargo and a U.S.-led price cap on Russian crude that trades above $60 a barrel have altered the oil's export path. The price cap prevents a surge in oil prices from the European embargo, but complicates Russia's ability to get top dollar on its exports.

Russia is expected to export 158 million barrels of crude by the sea in January, a top-five month on record, according to Kpler.

The availability of tankers isn't a problem, say Russian shipping executives.

A Dubai-based subsidiary of Russia's state-owned shipping giant PAO Sovcomflot and major Western shipping firms, including one of Greece's largest, move Russian crude under the price cap.

Gatik has taken 25 ships under its wing and manages them, but does not own them. Gatik tankers carry Russian crude from the Baltic Sea and Black Sea ports beneath the cap, with protection-and-indemnity insurance from the American Club.

More than 75 loadings of Russian crude from Dec. 5 through Jan. 14 were onto tankers without insurance from Western and Japanese clubs, but with insurance, Gatik must ensure the price of crude will be below the cap.

Russia Wants Exxon to Pay Up

The Russian General Prosecutor's Office is taking a shot at the American oil giant ExxonMobil, demanding $220 million in unpaid taxes.

According to court documents cited by TASS and Interfax, the Sakhalin regional court has listed a claim against Exxon Neftegaz Ltd, the company's Russian subsidiary.

The court declined to give any further information as Exxon isn't a party to the case. The oil major has remained tight-lipped about the situation, declining to comment.

Exxon exited a Pacific island oil project last year, which caused it to take an impairment charge of $4.6 billion on its Russian activities.

In response to Western sanctions on Moscow, the Russian government established a new entity run by Rosneft's subsidiary and took control of the Sakhalin-1 project.

The next hearing of the case is set for 28th February. Meanwhile, India's ONGC Videsh and a Japanese consortium, SODECO, were granted permission to keep their stakes in the project.

In short, the Russians are seeking a hefty sum in taxes, and Exxon, who has already exited Russia, is remaining tight-lipped about the situation.

The next move is in the hands of the court.

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Libya's Inner Political Struggle Thwarts Italy's Energy Hopes

In a dramatic turn of events, the Libyan Oil Ministry rejected the $8 billion deal that Italy's energy giant, Eni, had signed with the Libyan National Oil Corporation (NOC).

The deal was signed in front of the Prime Ministers of Italy and Libya, but the Oil Ministry says it violated the law and lacked approval.

Eni's CEO and NOC's CEO had agreed to develop "Structures A&E", a project aimed at increasing gas production for both the Libyan domestic market and Europe.

The combined gas production, set to start in 2026, was expected to reach 750 million cubic feet per day and bring an $8 billion investment with a significant impact on the industry and Libyan economy.

But, the Libyan Oil and Gas Minister, Mohamed Aoun, had other plans. He rejected the deal, calling it illegal and unequal between Libya and Italy.

Aoun says the deal bypassed the oil ministry and cabinet approval and changed a previous agreement signed in 2008. Aoun and his ally, the eastern-based Prime Minister Fathi Bashagha, also rejected the deal.

This inner political struggle in Libya could be the real deal-breaker for Europe's hopes of increased gas supply from North Africa and the Eastern Mediterranean, especially through Italy.

Eni's big Italian gas grab in Libya has been rejected, and the Italian energy giant may need to come up with a new plan to fulfill Europe's energy needs.

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